Commercial Property

Surge in office space inquiries prompts renewed confidence

A surprise surge in office demand may be the sign of better times to come, Redditch commercial property agent John Truslove has suggested.

But the High Street continues to struggle and he warns that shop rents will have to fall if retailers are to compete with the internet.

“At the moment, following a long and troubled period, we are having a run on offices,” said Mr Truslove. “There has been a definite increase in the number of inquiries.”

And, though part of that could, he believed, be down to the success of the firm’s new website, a trend seemed to be apparent.

Indeed it was evident across the board – from 200 sq ft premises to 10,000 sq ft.

“To be honest we don’t know why,” said Mr Truslove. “Sometimes you can’t see it at the time but later when you look back the reasons become clear.

“Or perhaps it is the old story about no buses for an hour and then three turn up together!”

However it did seem to be an indicator of more confidence in the economy.

Mr Truslove said: “Confidence is often a fragile flower which is difficult to propagate.”

But, citing the feel-good factor surrounding the Queen’s Diamond Jubilee, the London Olympics, England’s better-than-expected performance at Euro 2012 and the perception that our economy is in a
better state vis-à-vis our Continental partners, he asserted that there “was more of an air of optimism about”.

Conversely there was not much demand for shops.

He said: “If you take a shop, you have to pay rents, rates, insurance and staff.

“But often what you are finding is that potential customers play around on the computer, try on a dress, or whatever … then go home and buy it 20 per cent cheaper over the internet.

“Somehow shopkeepers are going to have to compete with the internet warehouse and that means rents will have to come down. Otherwise retailers won’t survive.

“And I think it could become a long-term trend. It would not surprise me if rents came down perhaps five to ten per cent.”

Rateable values too would need to be addressed and, with a revaluation set for 2015, that might be the opportunity.

He added: “The retailer wants to know they are getting some value for money from their general rates. Not such a rubbish idea would be to put refuse collection within that umbrella rather than
commercial operators having to pay separately in addition.”